Mozambique Nullifies State Guarantee on Loan Linked to Eurobond

Mozambique’s Constitutional Court nullified a government guarantee on a loan linked to the nation’s Eurobonds, potentially undermining a deal reached last week to restructure the debt, Bloomberg News reported. The judgment came three days after bondholders agreed with the government to reorganize $727 million of Eurobonds that Mozambique defaulted on in 2017. While bondholders said the nullification would have no impact on their agreement, lawyers said the decision may invalidate the debt. The June 3 ruling scrapped a 2013 guarantee for a credit to a state-owned tuna-fishing company called Ematum, which ultimately was converted into the $727 million sovereign bond. Read more